Pepsi, Ocean Spray Alliance Gets Juicier

PepsiCo and Ocean Spray are looking to squeeze more benefits out of their long-term distribution alliance. PepsiCo announced today plans to expand the partnership, which currently allows the No. 2 beverage giant to distribute single-serve Ocean Spray cranberry juice products, to encompass 15.2-ounce single-serve juice products.

PepsiCo will begin to produce and distribute the five additional beverage flavors—100% Apple, 100% Orange, Ruby Red Grapefruit, Pineapple Peach Mango and Strawberry Kiwi—in February of 2010.

It will also distribute a 15.2-ounce blueberry-flavored juice when Ocean Spray launches the new variety next year. Products associated with the expanded alliance will be available at convenience and gas, club, grocery and drug stores, as well as at mass merchandisers and foodservice providers.

The expansion will help increase Ocean Spray’s consumer audience, said Tom Silk, vp of marketing for hydration and juice brands at Pepsi-Cola North America Beverages, in a statement. “Ocean Spray juices and juice drinks represent an important part of our overall beverage strategy, particularly from a wellness standpoint. Not only is Ocean Spray a pioneering beverage innovation with sought-after super fruits like cranberries and blueberries, they have broad equity in a variety of healthy, great-tasting juice options.”

John Sicher, an editor at Beverage Digest, is not surprised that the companies sought to expand their alliance. “It’s a small part of the business for Pepsi, but its good for both companies. Ocean Spray benefits from the Pepsi distribution system, and the Pepsi bottlers get more offerings from a strong but small brand.”

The original alliance between PepsiCo and Ocean Spray, an agricultural cooperative of cranberry growers, began in 2007. At the time, the alliance only called for distribution of 15.2-ounce single serve juices in three Ocean Spray flavors: Juice Cocktail, Cran-Grape Grape Cranberry Juice Drink and Cran-Pomegranate.